Critical Minerals and the Energy Transition: ASEAN at the Centre of the Global Race
Critical Minerals and the Energy Transition: ASEAN at the Centre of the Global Race
The clean energy transition runs on minerals. Every electric vehicle battery requires lithium, cobalt, nickel, manganese, and graphite. Every solar panel needs silicon, silver, and tellurium. Every wind turbine uses rare earth elements in its permanent magnets. The IEA’s Global Critical Minerals Outlook projects that demand for key minerals could increase four to six times by 2040 under net-zero scenarios. The problem is that the reserves and processing capacity for these minerals are geographically concentrated — primarily in China for processing, and in a handful of countries for extraction — creating strategic vulnerabilities that governments, investors, and supply chain managers are only beginning to fully assess.
ASEAN sits at the epicentre of this challenge. Indonesia holds the world’s largest nickel reserves and has imposed export restrictions on raw nickel ore to force downstream processing investment domestically. Vietnam and Laos hold significant rare earth deposits. The Philippines produces nickel and cobalt. Malaysia has bauxite. At the same time, ASEAN is the fastest-growing market for EVs and renewable energy deployment in Asia.
What the Research Shows
Critical Minerals Supply Chains Security and Resiliency in the ASEAN, Vol. 1 (Springer, February 2026), edited by Han Phoumin (ERIA), Rabindra Nepal (University of Wollongong), and Farhad Taghizadeh-Hesary (Tokai University), brings together 14 peer-reviewed chapters applying microeconomic theory and empirical econometric analysis to the real structure of critical minerals markets. The book moves beyond policy advocacy to provide the analytical tools practitioners actually need: how do geopolitical risks transmit into mineral prices? What drives risk contagion across rare earth firms? What conditions make reshoring processing capacity economically viable?
Case studies cover Indonesia’s EV battery supply chain strategy, rare earth investment in Laos, Australia’s critical minerals market, Japan’s green growth policies, and the broader ASEAN region — giving readers both the theoretical framework and the empirical evidence to understand how supply chain vulnerability actually works in practice.
Key Organisations Working on Critical Minerals
IEA — International Energy Agency: Critical Minerals
Publishes the Global Critical Minerals Outlook and tracks supply-demand balances for minerals essential to the energy transition. The primary reference for policymakers and investors assessing mineral market risks.
ERIA — Economic Research Institute for ASEAN and East Asia
The Jakarta-based intergovernmental research organisation that co-edited this volume. Produces policy-relevant research on energy, critical minerals, and economic development across ASEAN and East Asia.
World Bank — Climate-Smart Mining Initiative
Works with resource-rich developing countries to ensure minerals for clean energy technologies are produced sustainably. Provides financing, technical assistance, and policy guidance to ASEAN and African mineral-producing nations.
IRENA — International Renewable Energy Agency: Critical Materials
Analyses the material requirements of renewable energy deployment and publishes assessments of supply chain risks for solar, wind, and battery storage technologies.
ASEAN — Energy Cooperation
The regional framework coordinating energy policy across 10 member states. ASEAN’s energy cooperation agenda increasingly includes critical minerals security alongside renewable energy deployment.
Q&A
Q: Why are critical minerals considered strategically important for the energy transition?
Critical minerals — lithium, cobalt, nickel, copper, rare earth elements, and graphite — are essential inputs for clean energy technologies. Unlike fossil fuels, they have unique physical properties that current technologies cannot replicate with alternatives. Supply disruption directly constrains the pace of the energy transition.
Q: What makes ASEAN particularly important in critical minerals supply chains?
Indonesia holds the world’s largest nickel reserves. Vietnam and Laos hold significant rare earth deposits. The Philippines produces nickel and cobalt. Malaysia has bauxite. Countries like Indonesia are using export restrictions on raw ore to capture value-added processing domestically, reshaping global supply chains.
Q: How do geopolitical risks affect critical mineral prices?
Export controls, political instability in producing regions, and trade disputes can cause significant price volatility. China’s dominance in rare earth processing and Indonesia’s nickel export restrictions are recent examples. This volume quantifies the relationship between geopolitical risk indicators and mineral price movements using econometric modelling.
Q: What is reshoring in critical minerals and is it economically viable?
Reshoring refers to relocating critical mineral processing from geopolitically concentrated locations to domestic or allied countries. The economic viability depends on scale, technology, labour costs, and energy access. This volume applies vertical integration theory to assess the conditions under which reshoring generates value versus imposes costs exceeding security benefits.
Q: How does critical mineral supply chain security connect to ESG investment?
ESG investors face a paradox: the minerals required for clean energy technologies are often mined under conditions raising environmental and social governance concerns. Supply chain transparency, credible certification, and transition financing for sustainable mining are central to resolving this tension.
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